Do You Have to Be a Licensed Real Estate Broker to Collect Rent for Rental Properties?

Collecting rent from rental properties can sometimes be accomplished by someone that is not a licensed real estate broker. More often than not it all depends on what state the property is in. Some states actually require what they call a CPM, which is certified property manager, or a certified property management specialist, in order to collect rent. Learn more about collecting rent for rental properties as a licensed or unlicensed real estate broker from an actual certified agent in this free video.

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Hello. This is D. Sidney Potter and I am here to talk a little bit about real estate, a very important issue. And, this is regarding licensure, real estate licensure. And the question I have before me is, do you have to a licensed real estate broker to collect rent from rental properties. This is a very important issue because, certainly, if you're out of scope and you're outside of the confines of the law, there could be some issues in terms of collecting rent without the proper licensure. So, to answer the question directly, do you need it? Yes and no. And that depends on which state you're in quite frankly. It would be not enough time to go state by state, so I certainly would recommend after the next three minutes, after we have a bit of discussion on this area, that you visit the state that you're in or that your rental property is in in terms of collecting rent. Now, as an example, if you happen to own a 16-unit deal anywhere in the USA, just about, it's uniform and you have to have an onsite manager. So, you'll find uniform standards like that across the board. But, in terms of individual states, it absolutely differs. Some states actually require what they all a CPM, which is certified property manager, maybe a CPMS, certified property management specialist, in order to collect rent. If you're in a situation where you have under your employ or under your engagement, a real estate broker or individual who isn't licensed and that particular state requires licensure, there is a way that you can engage that person. Since they're acting in a fiduciary capacity for yourself in terms of collecting rent, to collect the rent, and that is I would recommend - not what I would recommend, but, rather what the legal profession would recommend is that you have a processing fee that you pay the individual that collects the rents, not a commission. Because, obviously, most, typically, you need a license to collect a commission. And even to make your employment contract more tight, if you will, is to have a POA. POA is power of attorney. You'll want to specifically name the person who's acting on your behalf and what they're doing in terms of what property address that they're collecting the rent, that's very important. Now, in terms of a specific example, because there's 50 states, let me give you the State of Arizona, which does require licensure in some cases, however, they do have some waivers and exceptions. Exception number one, if it's a property manager working for an HA does not require licensure. If it happens to be an onsite manager, that would not require licensure irrespective of the size of the apartment complex or the condominiums that are being managed. If it just happens to be one rental, let's say you've got a little itty-bitty Craftsman out in Pasadena, California as a rental, it doesn't require a license. Let's say if you're engaging an individual to collect that rent, it's not going to require licensure. And, also, if you have a situation where you have leasing agents, leasing agents are licensed in terms of what they do, but in terms of being licensed to collect rent, they would not have to have licensure for that specific duty. So, with that, these are very quick, helpful hints on what to do if you have a rental property and you're a little bit confounded on whether or not you have to some type of - meet some type of statutory requirement in order to collect the monies. Once again, Sidney Potter, always appreciate your time. I look forward to discussing other issues on real estate matters.